Medicare's Extra Help Program

Basic health care is the right of all Americans. Those who cannot afford to pay for their health care may qualify for a low-income subsidy under the Medicare Extra Help program. Read on to understand more about this subsidy and its qualification requirements.

What is the Medicare low-income subsidy?

The Medicare Low-Income Subsidy helps Medicare beneficiaries with low incomes pay for Medicare Part D prescription medication costs. This benefit assists Medicare beneficiaries with a number of health care related expenses, including the following:

  • Part D monthly premium
  • Annual deductible
  • Coinsurance
  • Prescription copayments

In addition, there is no coverage gap or Medicare “donut hole” for prescription drug coverage for any members of the Extra Help program.

The U.S. Social Security Administration estimates that the Medicare Low-Income Subsidy saves people on limited incomes approximately $4,000 every year.

The amount of the subsidy varies depending on the individual’s income in relation to the Federal Poverty Level and the Social Security Act’s resource limitations.

Who qualifies for Medicare Extra Help?

People must satisfy a number of requirements to qualify for the Medicare Extra Help program’s low-income subsidy. You are eligible if the following are true:

  • You are receiving Medicare.
  • You reside in one of America’s 50 states or the District of Columbia.
  • Your yearly income and assets sit below the Medicare Extra Help program eligibility levels. These levels can change from year-to-year but are listed on the Medicare website. In 2020, your combined savings, investments, and real estate are not worth more than $29,160, if you are married and living with your spouse, or $14,610 if you are not currently married or not living with your spouse.

You may still qualify if your annual income is higher than the Medicare thresholds, but one of the following applies:

  • You support other members of your family living in your household
  • You live in Hawaii or Alaska

What assets count for Medicare Low-Income Subsidy testing?

Many applicants are confused about which assets count towards their Medicare Low-Income Subsidy testing and which are excluded. Medicare considers the following assets when making its determination:

  • Money in cash, checking, and savings accounts
  • Certificates of deposit
  • Stocks and bonds, including U.S. savings bonds
  • Mutual funds and individual retirement accounts (IRAs)
  • A second (and any subsequent) home
  • A second (and any subsequent) car

The following assets are exempt from Medicare’s calculations:

  • Your primary residence
  • Your first car
  • Your burial plot
  • Up to $1,500 cash set aside for burial expenses
  • Insurance policies
  • Household furniture
  • Other personal household items

How do I apply for the Medicare Low-Income Subsidy?

There are a number of ways to apply for the Medicare Low-Income Subsidy with the U.S. Social Security Administration:

Once you’ve applied, Social Security employees will review your application. After a decision has been made, you’ll receive a letter indicating whether you’ve been accepted into the Low-Income Subsidy program.

If you aren’t already enrolled in a Medicare Part D Prescription Drug Plan, you can do this once your application is accepted. You should do this as soon as possible because you need to be in a plan to get the Low-Income Subsidy benefits. If you don’t choose your plan in a timely fashion, Centers for Medicare & Medicaid Services will select one for you.

What If I Don’t Qualify for the Medicare Low-Income Subsidy?

Some states have initiatives called Medicare Savings Programs that can help people with low incomes who don’t qualify for the Medicare Low-Income Subsidy. Unless you’ve asked representatives not to pass on your information, Social Security will send your details to the State Health Insurance Assistance Program if you’re denied Extra Help. A state representative will then contact you to determine whether you’re eligible for the Medicare Savings Program. If you don’t receive this call, you can also contact the State Health Insurance Assistance Program yourself.

If you can’t get into a state program, don’t lose hope. You can always reapply for the Medicare Low-Income Subsidy if your circumstances or the threshold limits change.

If you know people who may qualify for the low-income subsidy, make sure to share this post and help them get the coverage they need.

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